How to Fill Out and Submit Texas Form P-4: Certificate of Compliance

Texas Form P-4, the Certificate of Compliance and Transportation Authority, is the filing that gives an operator the right to move oil, gas, or geothermal resources off a lease. Until the Railroad Commission of Texas approves a P-4 for the property, no operator or third-party gatherer can legally transport product from that site.¹ The form also identifies the authorized gatherers and purchasers for each well and certifies that the operator is complying with state conservation and environmental rules.

When You Have to File

Statewide Rule 58 sets out every trigger. The common ones:

A new oil lease, gas well, or other well before any production leaves the site.
A change of operator. Regulatory responsibility does not transfer until the RRC approves the new P-4.²
A change of gatherer, purchaser, or purchaser system code for oil, condensate, or gas.
Recompletion, or reclassification of a well from oil to gas or gas to oil.
Lease consolidation, unitization, or subdivision. If only some wells on a lease are being transferred, you also file Form P-6 with plats showing the lease and wells before and after the change.²
A field name or lease name change.

Gatherer or purchaser changes affecting several leases can be filed together through the P-4 Change of Gatherer/Purchaser application in the RRC Online System.³

What Must Be In Place Before You File

The receiving operator must already have a current Organization Report (Form P-5) with the Commission. The P-5 assigns the permanent operator number used on nearly every other RRC form.⁴ Operators file the P-5 annually.⁵

For an operator transfer, the incoming operator also needs financial security on file in an amount sufficient to cover current operations and the wells being acquired. Acceptable options are a performance bond (Form P-5PB), a letter of credit (Form P-5LC), or a cash deposit by cashier’s check.⁶ There are two structures:

Individual bond: $2.00 per foot times the total aggregate depth of all wells on the operator’s proration schedules.
Blanket bond: $25,000 for 1 to 10 wells, $50,000 for 11 to 99 wells, or $250,000 for 100 or more wells.⁷

If your existing security does not cover the wells you are acquiring, increase your bond, letter of credit, or deposit before submitting the P-4. Cash deposits renew automatically with each P-5 renewal and carry no annual fee, though any interest earned goes to the Oil and Gas Cleanup Fund.⁶

Filling Out the Form

You can download the blank P-4 from the RRC website or file it through the RRC Online System at webapps.rrc.state.tx.us. One rule matters more than any other: complete the entire form, not only the fields you are changing. Leaving Item 13 or Item 14 blank can wipe out your existing gatherer and purchaser information and cost you allowable production.²

Lease and Well Identification

Items 1 and 2 take the field name and lease name as they appear on the proration schedule. If the filing is to change one of those names, enter the proposed name. Item 5 takes the oil lease number or gas identification number; Item 7 takes the RRC District number.⁴ Item 9 lists the well numbers being transferred; if the list is long, enter “see attached” and use a separate sheet.

Gatherers and Purchasers

Item 13 covers gas well gas and casinghead gas. List every active gatherer and every purchaser with each party’s percentage of take. Split connections may use two decimal places, and the gatherer percentages must total 100 percent, as must the purchaser percentages. If a purchaser’s system code is changing under the same purchaser name, attach a letter of explanation from the purchaser. Item 14 handles oil and condensate gatherers in the same format.² An operator listing itself as a purchaser must separately request a purchaser’s system code under Statewide Rule 34.

Signatures

For an operator change, Item 15 is signed by the previous operator, certifying that operating responsibility has been transferred in its entirety. Item 16 is signed by the incoming operator, taking responsibility for regulatory compliance and for plugging every well on the filing.⁴ A non-employee agent may sign only if that agent is already listed on the organization’s P-5 report. A signature from an unauthorized agent will get the P-4 rejected.¹

Where to File and What It Costs

Submit the original P-4 to the Commission’s Oil and Gas Division in Austin, or file online through the RRC Online System, which handles gatherer and purchaser changes well and supports bulk filings.³ Some filings need attachments, such as a Form P-6 and plats for partial well transfers, or a purchaser letter for a system code change.

The Statewide Rule 78 fee schedule does not set a filing fee for a standard P-4 (new well, operator change, or gatherer change). The only P-4-related fee on the schedule is $750 to reissue a certificate after a severance order, which is a $300 base fee plus a 150 percent surcharge.⁸

What Happens After Filing

The Oil and Gas Division reviews the P-4 for completeness and accuracy. When an operator designation is changing, the Commission may ask for evidence that the incoming party actually has the right to operate the lease or well.¹ The RRC does not publish a standard processing time, so incomplete filings and complex transfers can sit.

Approval produces an active Certificate of Compliance, which stays in force until the next approved P-4 for the property. All entities listed on the form receive written notification. Gatherers and purchasers usually want a copy before they will connect to a new well or continue service under a new operator, so keep both digital and paper copies for field operations and audits.

Why P-4s Get Held Up

Most rejections are avoidable:

Filing only the changed fields instead of the whole form. Every item must be completed, even the ones you are not changing.²
Insufficient financial security for the wells being transferred.²
A non-employee agent signing without being listed on the operator’s P-5 report.
Partial well transfers filed without the required Form P-6 and plats.
Compliance history. Under Texas Natural Resources Code Section 91.114, the Commission can refuse a P-4 if the operator, or anyone holding a position of ownership or control, has had a final judgment, final administrative order, or agreed order for a safety or pollution violation in the previous seven years. The bar reaches violations at other companies where that person held at least 25 percent ownership, served as an officer or director, or was a general partner.⁹

If the Commission disapproves a P-4 on compliance-history grounds, it must give a written explanation. You can clear the bar by correcting the violation conditions (or agreeing to a correction schedule) and paying all penalties and cleanup costs, or agreeing to a payment plan.¹⁰

Inactive Wells You Inherit

A P-4 transfer moves the surface and plugging obligations for inactive wells to the new operator, and buyers routinely underestimate what those obligations cost. The requirements scale with how long a well has been shut in:

All inactive wells: electricity disconnected.
Shut in 5 to 10 years: all fluids purged from tanks, pipes, and vessels.
Shut in more than 10 years: all surface equipment removed.¹¹

You certify surface compliance on Form W-3C with your annual P-5 renewal. If you need more time to plug, file Form W-3X with the required attachments and a $250 total fee per well ($100 base plus $150 surcharge).⁸ Once the P-4 is approved, the prior operator is released from these obligations and they belong entirely to you.¹²

False Filings and Severance Orders

Under Natural Resources Code Section 91.143, submitting false applications, reports, or documents to the Commission is a felony punishable by two to five years in state prison, a fine of up to $10,000, or both. The Commission can also impose a separate administrative penalty of up to $1,000 per violation.¹³ A false filing can also trigger the seven-year bar under Section 91.114, blocking future certificates at any organization the responsible person is involved with.

If the Commission issues a severance order against a lease, production and transportation from every well on that lease become unlawful until a new certificate of compliance is issued.¹⁴ To reconnect, resolve the underlying violation and pay the $750 reissuance fee per order. Producing or transporting under severance carries an administrative penalty of up to $10,000 per violation.

1
Legal Information Institute. 16 Tex. Admin. Code 3.58 – Certificate of Compliance and Transportation Authority; Operator Reports
2
Railroad Commission of Texas. P-4 Certificate of Compliance and Transportation Authority Instructions
3
Railroad Commission of Texas. Notice to Oil and Gas Operators – Form P-4 Multiple Gatherer/Purchaser Online Submission
4
Railroad Commission of Texas. Form P-4 – Certificate of Compliance and Transportation Authority
5
Railroad Commission of Texas. Oil and Gas Directory – Operator Contact Information
6
Railroad Commission of Texas. Summary of Requirements and Responsibilities
7
Railroad Commission of Texas. P-5 Financial Assurance Instructions
8
Railroad Commission of Texas. Oil and Gas Fees and Surcharges
9
State of Texas. Texas Natural Resources Code Title 3 Chapter 91
10
FindLaw. Texas Natural Resources Code – NAT RES 91.114 – Acceptance of Organization Report or Application for Permit; Approval of Certificate of Compliance; Revocation
11
Railroad Commission of Texas. HB 2259/HB 3134 – Inactive Well Compliance Summary
12
Railroad Commission of Texas. HB 2259 81R/2009 – Transferring Wells to New Operators
13
Texas Comptroller of Public Accounts. Texas Comptroller Manual of Accounts – Revenue Object 3314 – Oil and Gas Violations
14
Railroad Commission of Texas. Severance Reconnect Process